United States: GSA Leases Under Unusual And Compelling Urgency

The General Services Administration (GSA) released Lease Acquisition Circular, LAC-2020-01, issuing Leasing Desk Guide, Chapter 23, Lease Acquisitions Using Unusual and Compelling Urgency, on April 2, 2020. In light of the current circumstances surrounding COVID-19, lessors may experience an uptick in instances where the federal government is required to enter into urgent lease acquisitions, and therefore should understand the different procedures and processes the government uses when entering into leases under an unusual and compelling urgency. This blog post outlines the triggering factors that give rise to urgent lease actions, the expedited acquisition process, and a description of the differences between traditional leasing actions and urgent leasing actions.

What is Unusual and Compelling Urgency?

Under the Competition in Contracting Act (CICA) 41 U.S.C. § 3304(a)(2) and Federal Acquisition Regulation (FAR) 6.302-2, when "the agency's need for the supplies or services is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals, full and open competition need not be provided for." Utilizing this authority, the GSA can forego full and open competition procedures and enter into urgent lease actions in order to swiftly acquire facilities so agencies can carry out their mission. States and municipalities are currently entering into short-term leases to house overflow COVID-19 patients, and it is conceivable that the current crisis could lead to similar leasing actions by the federal government.

What Are Considered Urgent Lease Actions?

"Urgent lease actions" are leases entered into using unusual and compelling urgency justifications to limit competition in response to an urgent need. The urgent need can be related to a statutorily authorized emergency or disaster declaration, localized disasters or events such as a fire at a particular building, or urgent requests for space to meet a critical occupancy date where delay in fulfilling the need will result in significant harm to the government or public. Urgent lease actions can occur with or without a disaster declaration. It should be noted that Chapter 23, Lease Acquisitions Using Unusual and Compelling Urgency, excludes leasing space for Federal Emergency Management Agency (FEMA) following a declaration of disaster under the Robert T. Stafford Act, which can be found in Chapter 12, Disaster Leasing, which specifically focuses on acquiring leases for FEMA following a disaster. As of this writing, President Trump has declared major disasters for all 50 U.S. States.

What are the Differences Between Normal Leases and Urgent Lease Actions?

1. Proper Authorization

Proper authorization must be received in order to utilize unusual and compelling urgency procedures either by way of a class justification or a project specific justification. GSA has a standing class justification for three specific general instances where an agency needs to acquire space, including when there has been a statutorily authorized emergency declaration – such as the emergencies and disasters declared by the president in response to the epidemic – a localized disaster or event, or a mission critical deadline. See Chapter 23, Attachment 1: Class Justification for Other Than Full and Open Competition. If the class justification does not cover the instance, then the Lease Contracting Officer (LCO) can prepare a Justification for Other Than Full and Open Competition using the available template in Chapter 5. Unusual and Compelling Urgency justifications must demonstrate the harm to the public or agency mission if full and open competition is used to satisfy the agency's requirements. Unusual and Compelling Urgency justifications should never be used to expedite a procurement action solely for customer satisfaction or workload management purposes.

2. Lease Terms

Leases over the simplified lease acquisition threshold, acquired using unusual and compelling urgency procedures, are limited to one year, including extensions and renewals, unless the Head of Contracting Activity (HCA) executes a determination and findings (D&F) that determines exceptional circumstances exist. However, even if exceptional circumstances exist, the lease term can still not exceed more than five years unless there is approval from the GSA Public Buildings Service (PBS) deputy commissioner.

3. Acquisition Procedures and Process

The GSA Leasing Desk Guide indicates that while an urgent lease acquisition schedule can vary significantly based on the requirements of the agency, a "typical" lease acquisition using unusual and compelling urgency procedures should occur within 30-60 days. That is well outside the normal lease acquisition timeline, which includes months for the development of requirements, market research, and publication and execution of the competition. Additionally, the guidance provides that acquisition strategy should use Lowest Price Technically Acceptable (LPTA) procedures and to avoid best value trade-off selection procedures to the extent possible. Negotiations for lease acquisitions using unusual and compelling urgency may use an accelerated process pursuant to GSA Regulation 570.106(g)(2), and the LCO does not have to provide a 20-calendar-day minimum timeframe for receipt of proposals in cases of unusual and compelling urgency.

4. Pricing

The Leasing Desk Guide acknowledges that "leases acquired using expedited acquisition and occupancy schedules may carry a premium as the Offeror is expected to bid and deliver space faster than is normal." However, the LCO is still required to make a fair and reasonable determination and should consider the market as well as the expedited and accelerated nature of the acquisition.  

Lease Commencement and Closeout does not vary from procedures described in normal leasing circumstances.

Conclusion

Lessors may encounter situations where the Federal Government needs to enter into a lease under an accelerated timeframe necessary to respond to an event or critical government need. Under GSA's guidance for unusual and compelling urgency, lease terms cannot exceed one year absent extraordinary circumstances, the typical timeframe for an urgent lease acquisition averages 30-60 days and utilization of LPTA procedures are strongly encouraged.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.